Buyers Journey: What is a Lead in Real Estate?

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Written By Justin McGill

DealBloom aims to share the latest tips and strategies to help realtors, brokers, loan officers, and investors navigate the world of real estate.

You’ve probably heard of “leads” in retail sales and marketing. But what is a lead in real estate? A lead is defined as any potential customer who has shown interest in your property. To nurture these leads and turn them into sales, it’s important to understand the different stages of the buying journey.

I remember when we were looking for our first home. We started by browsing online listings and getting a feel for what was out there. Once we found a few properties that caught our eye, we reached out to the listing agent to schedule showings. At this point, we had become what is a lead in real estate jargon.

What Is a Lead in Real Estate?

A lead is someone who has the potential to become a home buyer. The job of a real estate agent is to find leads and then turn them into customers.

Real estate leads are people who may be interested in purchasing a property. By getting their contact information, you can reach out and introduce yourself as a real estate agent who can help them with their needs.

A “lead” is a prospective customer. Before you can make a sale, you need to cultivate a relationship with them.

As a real estate professional, one of the most important things you can do is focus on lead conversion. No matter the size of your business, this tactic will help increase sales. By understanding what real estate leads are and how to convert them, you can take your business to the next level.

This post will teach you what types of leads are generated in real estate and how to generate them.

We make it easy for you by syncing your CRM with all the tools you use, so you can easily manage and grow your client relationships.

Qualified vs. Unqualified Real Estate Leads

Does your broker provide you with a list of potential contacts? How many of your prospects are wasting your time?

Unqualified buyers are people who aren’t ready to buy homes.

Here are some other factors to consider when determining if a prospect is unqualified:

  • They cannot afford to buy a home right now
  • They are not ready to sell their home
  • They do not know you
  • They have not started the buying/selling process
  • They have a high churn rate

On the other hand, a qualified prospect will have the following characteristics:

  • They have shopped around for real estate agencies
  • They already have a relationship with you
  • They understand what they need
  • They have a particular budget
  • They are ready to buy or sell right now

Now that you know how to identify different quality levels of a lead, how can you focus your time on only working with the most qualified, ready-to-buy, and interested parties?

Are you the kind of agent who believes that every single prospect is worth your time? Of course, all potential clients have value, but not all of them will be a good fit for you.

Are you spending too much of your time on leads that don’t turn into customers?

You’re probably wasting a lot of time on leads that are either not interested or are not even qualified for your services, whether they’re FSBOs, pre-foreclosures, or expired leads.

Learn the difference between qualified and unqualified leads and how to use your time wisely.

What is Lead Conversion?

Real estate lead conversion is the process of leading a prospect through the sales funnel and turning them into an actual customer. You’ll start with a long list of leads – some will buy from you, some won’t.

When a lead buys from you, they are considered a converted lead. The process of leading potential clients through the buying process is called a lead conversion.

How to Qualify Your Leads

Some agents will waste time on all types of lead generation methods because they don’t have a system in place to weed out the bad or unqualified.

To be successful, you need to clearly define what type of client you want to work with.

Think of your preferred neighborhood, the average income of your clients, and the style of homes they like.

Then you can create a buyer profile, which is your description of an ideal client.

Having this clear distinction of who you can and can’t work with will help you to know exactly what type of clients you should be working with.

It’s important to have a lead qualification process to save time and energy. By qualifying leads, you can avoid working with nightmare clients or complicated sales. If a lead is qualified, it will be easier to work with them and get the sale.

Start by grading your lead on their first point of contact with you. Maybe they came in through referral, or you had a conversation with them, or they found you through a contact form.

The BANT method is the simplest way to score a lead.

  • Budget: How much are they willing to pay for a home?
  • Authority: Are they the decision maker or other people are involved?
  • Need: How badly do they need a real estate agent?
  • Timeline: When are they looking to buy or sell?

While this method is a simple one, you want to score your leads into different categories. An in-depth method of doing this would be asking questions such as what neighborhood they’re looking to buy in.

Ask them how they prefer to communicate with their real estate agent.

Next, you’ll need to decide the rating scale for your score. A 1-10 or 1-100 system is the most common.

Some questions may be weighted more than others depending on what is most important to the client. For example, if a client has a limited budget, then the budget may be weighted more heavily than the neighborhood.

If a client is looking for representation now, that would be weighted heavily in your system.

No matter what criteria you use to qualify leads, it is important to be clear and consistent in your process.

How to Deal With Unqualified Leads

Just because a prospect is unqualified, does that mean you should just ignore them?

Of course not. Many studies have shown that only a small percentage of leads are ready to buy or sell now.

Also, up to 80% of leads require five touches before closing. Yet, only 8% of agents follow up that many times.

It’s important to build a relationship with your lead even if they don’t seem ready now. You never know when they’ll become interested in your services.

If you have unqualified leads, you can add them to a monthly newsletter list where they will be contacted once every 3-4 weeks. You can then follow up by phone 3-4 months later to see if they are still interested in your services.

What is Lead Nurturing?

Lead nurturing is when you take care of a lead and make them feel as comfortable as possible.

During the lead-nurturing phase, you build a trusting relationship with the client, which will eventually lead to them becoming a customer.

The point of lead nurturing is to make them see you as an individual, not just a company. This will make them feel more comfortable about spending their money with you.

A psychological phenomenon known as the “reciprocity effect” comes into play during the lead nurturing process. Because you’ve put so much effort into helping your leads, they feel like they owe you something in return.

In real estate, this comes by way of a sale.

As you guide your prospect through the buying process, remember that it’s your job to nurture the lead.

what is a lead in real estate (Source)

Stages of a Real Estate Buying Journey

The stages of the buying journey are important to understand when selling anything, as you will attract people who are at different points in the process. There are three main parts of the funnel and five unique stages. These stages are:

  • Awareness. In the first stage, which is the first piece of your sales funnel, you have to make sure people are aware of your product, company, and sales process. In the real estate industry, this might mean someone who’s thinking about listing their house for sale but hasn’t decided for sure.
  • Interest. In this stage of the sales cycle, a lead might reach out to you for more information or to ask more about the sales process. In its most basic definition, this is when a prospect views a listing.
  • Conversion. The third stage of the sales funnel is when people show real interest in your offerings. They begin to interact with different properties you have listed, or they might read some of your more informative blog posts about the buying and selling processes.
  • Qualification. This is the point in the sales cycle where a prospect has researched their options and is ready to make a final decision. They now know what they want, and are looking for a real estate agent who can help them get it.
  • Closing. The third and final stage of the sales funnel is the closing. This is when the prospect signs the contract and the sale is complete.

People in different stages have different needs. If you try to sell somebody a home in the awareness phase, you might spook them.

If you try telling the customer why they should sell the house in the closing phase, you might miss your chance.

Drip campaigns are a series of emails that are sent out automatically based on certain triggers. For example, when someone subscribes to your newsletter, when they show an interest in a certain property, or when they start searching for homes in a specific location.

When customers are first considering a purchase, they will automatically receive a drip campaign email that corresponds to their specific trigger. This allows them to stay aligned with the customer’s buying journey.

Most automated campaigns use software or programs to send a series of emails to subscribers.

Real estate marketing is all about providing content that people want to share. The goal is to get your content shared as much as possible within your target demographics.

How do you do that? Create useful content that people will find interesting.

This helps build your authority as a real estate agent and creates a higher level of brand awareness for your company. You can post marketing content on your site as well as your company’s social media profiles to help nurture potential buyers along in their journey.

Having a social media presence for your real estate business is the first step in getting new followers. Once people start following you, they’ll naturally come to you.

Your friend list is chock full of potential sales — it is up to you to turn them into actual customers.

Social media is a great way to get your message to potential customers for free.

A real estate newsletter is an excellent way to convert leads. It provides new information, deals, properties, and developments at your company, and it keeps you at the forefront of your leads’ minds.

Since they gave you their email, it’s safe to assume that they are interested.

If you’re not sure where your lead is in the sales funnel, a brief survey can help. You can also use a newsletter to convert leads into customers.

Email segmentation is a great way to ensure that you are sending the most relevant information to your leads. By breaking down your mailing list into segments, you can more easily target each stage of the buying journey and convert more leads into customers.

These different buyer personas are better able to capture the different stages of the buying process.

If you’re looking for a fast and easy way to segment your mailing lists, try combining a brief survey with click segmentation. This will help you target your audience more effectively and ensure that your messages are relevant to their needs.

Email segmentation is a powerful tool that can help you nurture and convert leads. By being more specific in your messages, you can create a more personalized conversation that will resonate with your audience.

Instead of marketing to a broad audience, you focus your marketing efforts on individual people.

You can personalize the messaging that you send to your prospects.

This level of attention is key to nurturing a lead and converting them into a customer. However, you don’t want to focus exclusively on marketing personalization at the expense of your general marketing campaigns. Both are important to maximize your results.

Use this in conjunction with your traditional marketing strategies.

Conclusion

What is a lead in real estate? As you can see, the real estate buying journey is a complex process with many different stages. From generating leads to nurturing them along, each step is crucial to closing a deal. By understanding the ins and outs of the journey, you’ll be better equipped to successfully market your property and turn prospects into buyers.

Justin McGill